MIAMI (CBSMiami) – Joe Machado saw his homeowners’ insurance bill climb from about $800 in 1992 to $4,600 in 2012.

He worries it’s going to get worse.

As of November 1st, the South Miami-Dade homeowner was covered through the state’s citizens’ insurance program.

He recently got a formal letter from Citizens’ Insurance informing him his policy was being taken over by another company.

Joe says he never even heard of the new company and adds “I don’t know who the new insurance company is. To tell you the truth, not even my agent knows. I spoke to my agents. They said they came out of the blue and they don’t know who these people are.”

So why’d he get a so-called de-population letter from Citizens?

It’s all aimed at cutting possible storm losses to Citizens’ Insurance program. State lawmakers, lead by Governor Rick Scott, mandated it “depopulate” some 316,000 policies statewide.

Starting in September, several new companies began offering new policies.

Some industry insiders said some of those new policies include rate hikes of as much as 136%.

Critics said it’s almost impossible to learn how they can opt out of the offer, staying with the state’s insurance program. To do that they have to file a special opt-out form within 30 days.

The deadline for some 210,000 customers is Tuesday, November 6th. It’s known as a “negative option plan”: if you don’t fill out the form before the deadline, your home will be automatically dropped from the state’s policy then transferred into the private company.

If you’re one of the many people who don’t always open every piece of mail, or just breeze through the letter, your homeowners policy will automatically be transferred.

Local insurance agent Dulce Suarez-Resnick of Miami’s NCF Insurance worries “They don’t give you the form. The opt-out form is not included in the documents that are sent to you. So the customer doesn’t know…they are clueless their policies will be taken out of Citizens.”

State Representative Frank Artilles is a strong critic of the depopulation program.

The District 119 Republican from South Miami-Dade worries the new “take-out” companies may not have the cash reserves required to pay claims the next time a bad storm hits South Florida.

Artilles is concerned because “They are not even rated by A.M. Best rating service. So basically you are going from the state or Citizens to a company that could go away after the first hurricane that hits. We not only don’t have choices, but their philosophy is crazy. There is no safety net. Citizens is our safety net and they’ve failed to realize that.”

Joe Machado opted out of his new offer after checking with his insurance agent. He’s staying with Citizens.

How does he think state lawmakers and insurance regulators have done with informing local customers about their choices? “Very poor, very poor job. We get hit by the insurance companies. From the State of Florida…nothing…I have nothing in writing from them,” Machado said.

In some cases, the new “take-out” policies may offer more coverage for higher prices.

If your policy is selected for de-population, contact your local agent for more information. Remember: the deadline to opt out for most local policyholders is Tuesday, November 6th.

For details regarding the depopulation program, for company contact information, or for copies of takeout companies’ opt-out forms, visit

If you need assistance to determine the name and contact information for your agent, to ask general questions about the Depopulation program, or to inquire about specific policy issues, call the customer care center at 1-888-685-1555.


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